Independent Oil and Gas (IOG) has signed a sale and purchase agreement with Verus Petroleum to acquire 100% of the shares of Oyster Petroleum.
The acquisition is conditional upon Verus completing the transfer of certain licences into Oyster.
The deal is expected to be worth an initial consideration of £1million, with further payments of up to £3.25million upon the achievement of certain milestones.
Mark Routh, chief executive of IOG, said:”We are extremely pleased to have agreed this major transaction, to acquire a number of attractive assets, in what remains a challenging market. These assets will more than double our 2P and 2C recoverable resources at a very compelling price and come with substantial pre-trading expenditure.
“This acquisition expands our hub strategy; to gain control over a number of dormant discoveries that can be developed through common existing infrastructure, thereby generating significant economies and capturing many synergies.
“Once all announced transactions have completed, we should have more than 100 MMBoe of low risk resources in our portfolio. This will be approximately two thirds gas and one third oil which provides an excellent springboard for us to become a significant development and production company.
“The additional scale will further enable IOG to contribute positively to UK energy security, in line with the principle of Maximising Economic Recovery for the UK North Sea.
“We remain confident that with the right approach, there is considerable value remaining in the North Sea and I look forward to making further updates on the Vulcan Satellites development plans in due course.”